Logan & Kanawha Coal Co. v. Detherage Coal Sales, LLC, 841 F. Supp. 2d 955

Logan & Kanawha Coast Co., LLC and Detherage Coal Sales, LLC formed a March 2010 contract via fax exchanges, with Detherage altering the quantity term and Logan's signed purchase order indicating “We have a deal.”
The May 11, 2010 Logan letter enclosed Logan’sStandard Terms & Conditions containing an arbitration clause, but there were two different Logan terms documents and no clear incorporation by reference.
Logan later sued (Dec. 28, 2010) for breach and sought to confirm an AAA arbitration award ($2,706,000) in Logan’s favor.
Detherage moved to vacate the arbitration award; Logan moved to confirm the award; the court is now ruling on these motions.
The court determines there was no valid agreement to arbitrate because (i) incorporation by reference failed, (ii) § 46-2-207 did not apply to the May 11 letter, and (iii) modification under § 46-2-209 was not agreed, so the arbitration award must be vacated and cannot be confirmed.
The court concludes there was no underlying agreement to arbitrate, so detherage’s motion to vacate is GRANTED and Logan’s motion to confirm is DENIED.

Issue	Plaintiff's Argument	Defendant's Argument	Held
Whether the March 2010 agreement included an arbitration clause.	Logan contends arbitration terms were incorporated.	Detherage did not agree to arbitration.	Arbitration clause not part of the contract.
Whether Logan’s terms were incorporated by reference.	Terms incorporated by reference via “ALL TERMS & CONDITIONS.”	No clear reference to specific terms; ineffective incorporation.	Not incorporated by reference.
Whether § 46-2-207 adds terms via a written confirmation.	May 11 letter constitutes confirmation adding arbitration terms.	Letter not a written confirmation; contract already enforceable under Statute of Frauds.	§ 46-2-207 does not apply to the May 11 letter.
Whether the May 11 letter modified the contract under § 46-2-209.	Silence plus performance constitutes acceptance of modification.	Silence cannot manifest assent to modification when duties exist under the original contract.	No valid modification; arbitration provision not incorporated.
Whether the arbitrator’s decision is arbitrable given no agreement to arbitrate.	Arbitration award should be confirmed.	No underlying agreement to arbitrate; vacatur appropriate.	Arbitration award vacated; confirmation denied.

AT&T Technologies, Inc. v. Communications Workers of America, 475 U.S. 643 (U.S. 1986) (arbitration authority arises only from agreement)
First Options of Chi., Inc. v. Kaplan, 514 U.S. 938 (U.S. 1995) (courts decide arbitrability questions unless contract clearly provides otherwise)
Granite Rock Co. v. Int’l Bhd. of Teamsters, 130 S. Ct. 2847 (U.S. 2010) (who decides arbitrability depends on contract terms unless otherwise stated)
Howsam v. Dean Witter Reynolds, Inc., 537 U.S. 79 (U.S. 2002) (arbitration is a matter of contract; existence of underlying agreement is essential)
Arrants v. Buck, 130 F.3d 636 (4th Cir. 1997) (courts determine existence of agreement to arbitrate under contract law)